Scenario Planning with the RIMS SERMC

Jan 23, 2024

Guest

Denise Sobczak

Guest

Carol Fox

Guest

Tom Easthope

Tom Easthope, Carol Fox, and Denise Sobczak discuss scenario planning and the new paper from RIMS SERMC on managing alternate futures. They talk about the importance of scenario planning in enterprise risk management and its benefits and customization. They also mention upcoming workshops and webinars on risk management.

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Chapters

Transcript

Episode notes

Introduction

00:00 • 4min

Introduction and Overview of RIMS SERMC Council

04:06 • 9min

The Significance of Scenario Planning in Enterprise Risk Management

12:47 • 5min

Plug for RIMS Workshops and Webinars, and Shoutout to Spencer Educational Foundation

18:01 • 2min

Scenario Planning: A Baseline Understanding

20:18 • 4min

Scenario Planning: Benefits and Customization

24:31 • 11min

Sharing Ideas and Future Plans for Risk Management

35:16 • 4min

Welcome to RIMScast. Your host is Justin Smulison, Business Content Manager at RIMS, the Risk and Insurance Management Society.

Justin interviews guests Tom Easthope, RIMS SERMC Chair, Carol Fox, Retired risk manager, and Denise Sobczak, Director, Group Risk Management, BIC Group. They tell how they became ERM practitioners and they discuss the new paper from RIMS SERMC on scenario planning.

Visit the Strategic and Enterprise Risk Management Center for more SERMC contributions and ERM resources.

Rims.org/resources/strategic-enterprise-risk-center

Listen in to learn more about starting scenario planning within your organization.

Key Takeaways:

[:01] About RIMScast.

[:13] Public registration for RISKWORLD 2024 is now open. Explore infinite opportunities with RIMS from May 5th through May 8th, 2024, in San Diego, California. Register at RIMS.org/riskworld. Be grateful it's a leap year! Advance Registration rates end on February 29th, 2024.

[:38] About today's episode of RIMScast. I will be joined by members of the RIMS Strategic and Enterprise Risk Management Council to talk about scenario planning and alternate futures.

[1:00] The RIMS-CRMP is the only competency-based risk management credential. That matters because earning the certification shows employers and recruiters that you have the skills necessary to manage risk and create value for your organization. [1:18] Several Exam Prep virtual workshops are coming up. On March 19th and 20th, this two-day course will be presented with PARIMA. The two-day RIMS-CRMP-FED Exam Prep Virtual Workshop will be held on January 30th and February 1st. Visit the certification page on RIMS.org for more information. A link is in these show notes.

[1:49] RIMS is looking forward to RISKWORLD 2024 in sunny San Diego, California, from May 5th through May 8th, 2024. Public registration is open. Register today at RIMS.org/RISKWORLD and the link in this episode's show notes. Early registration rates are available through February 29th, 2024, brought to you by RIMS and leap year!

[2:15] I am delighted to welcome three guests to RIMScast today. They are all members of the RIMS Strategic and Enterprise Risk Management Council (SERMC). I'll be joined by council chair Tom Easthope, and members Denise Sobczak and Carol Fox. They're here to talk about all things ERM and, especially, scenario planning.

[2:41] In November 2023, RIMS published "Managing Alternate Futures with Scenario Planning," which is a professional report that you can download through the Risk Knowledge page at RIMS.org. That report was authored by Tom Easthope and Carol Fox and Denise Sobczak was one of the lead contributors.

[3:01] The report guides you through the scenario planning journey. You can learn about critical steps, key considerations, scenario planning types, and case studies. Tom and Denise led two sessions on scenario planning at the RIMS ERM Conference in Denver in November 2023. The sessions were very well attended and we will extend the dialog.

[3:39] Tom Easthope, Carol Fox, and Denise Sobczak, welcome to RIMScast! These three guests are three of the great minds of the Strategic and Enterprise Risk Management Council here at RIMS.

[4:11] Carol Fox, Tom Easthope, and Denise Sobczak introduce themselves to the listeners.

[5:42] The council was started by Carol Fox. There are 11 members, all in enterprise risk management roles. It's a diverse group, representing different industries and different-sized organizations. The council looks at things such as thought leadership projects that bring value to the risk community.

[7:29] Tom addresses what we can expect this year from the SERMC. They will continue looking into the changing landscape of the future. They will look to provide the nuts and bolts of how to survive in this increasingly dynamic and chaotic risk management world where staff are often small. Some ERM departments have a staff of one.

[8:35] Denise became an ERM practitioner after completing an international assignment in Brazil and returning to the U.S. She had been a finance professional. ERM opened up a different world to her looking beyond the financial risks to all aspects of the organization. This shift was in 2015.

[9:34] Tom got into risk management when he owned a small international company and had to get certificates of insurance for all of his subcontractors. He had to create a risk management program. He then worked for a corporation where business continuity was important. That was Tom's entry into ERM. He was there for 16 years,

[10:54] Carol has been in ERM "for a very, very long time." She shares a story about her entry into ERM through RIMS and the SERMC. What she loves about the SERMC is that she gets to talk to so many different people. She pitched ERM to an attorney at her organization and he became an advocate for it. The CFO also wanted ERM.

[11:56] Carol was given the go-ahead to get ERM started, with no software for it or staff. She came up with a program of ERM and business continuity and worked with a strategy group. Years later at an airport, she met a former colleague who told her they still talk about her at the company.

[13:17] Scenario planning is a lot of fun. Carol stresses how crucial it is to engage people on a level that's meaningful to them. The scenarios you write about what the future could look like need to inspire thinking about things differently.

[14:38] Denise says we hear every year how much more dynamic and evolving the risk landscape is and it continues to be the case. She points to scenario planning during an election year to anticipate the policy changes that may be put in place after the election.

[15:45] Scenario planning is taking what is imagined in the future and taking into your hands what are the things that require immediate action and what would be the longer-term actions you need to take, Scenario planning is for action-driven conversations. It can impact your operating plan and practices and it can lead to agility.

[16:34] Tom says scenario planning is risk identification. It helps you consider in a structured way the unknown risks. It will become less and less feasible for a person working alone to understand all the permutations of risk. Relevant scenario planning is becoming a more necessary part of your ERM program's value proposition.

[17:59] RIMS plug time! RIMS Virtual Workshops: Visit RIMS.org/virtualworkshops to see the full calendar. On February 7th and 8th, we have Facilitating Risk-based Decision Making. On March 6th and 7th, our friend Elise Farnham hosts Applying and Integrating ERM.

[18:24] Information about these workshops and others is on the RIMS Virtual Workshops page and a link to the full calendar is in this episode's notes.

[18:32] On February 29th, Hub International sponsors Ready for Tomorrow: Protecting Your Profits in the Property Market. On March 7th, in celebration of International Women's Day, Origami Risk leads the session Women of Risk & Compliance: Leading & Learning One Step at a Time.

[18:53] Visit RIMS.org/Webinars to learn more about these webinars and to register! Links are in the show notes. Webinar registration is complimentary for RIMS members.

[19:07] Quick shout-out to our friends at the Spencer Educational Foundation, which funds the education of next-generation risk management and insurance talent. Spencer's scholarship program is open but coming to a close on January 31st for undergraduate and graduate students and on March 1st for Ph.D. applicants.

[19:26] Spencer's course development grant cycle is entertaining submissions through February 15th. Students and risk management and insurance faculty with interest can visit Spencered.org for additional details.

[20:17] This paper was inspired by a discussion in the SERMC. They wanted to provide risk practitioners with tools to assess and prepare for risks and they saw they needed to provide a baseline before giving tools. They needed to create a baseline understanding of what scenario planning is about and then produce more materials on how to do it.

[21:39] The scenario planning white paper has been issued, but there is more to come with different frameworks or methods of scenario planning.

[22:34] Tom generally agrees with this view and adds that his interest in this topic was ignited by reading The Art of the Long View: Planning for the Future in an Uncertain World, by Peter Schwartz. In 2023, large language models and technology tools became available to bring scenario planning research within the grasp of individual practitioners.

[24:13] If you were at the RIMS ERM Conference 2023 in Denver, you will remember the two sessions on scenario planning that Tom and Denise led. This episode is an extension of those sessions. In one of those sessions, people worked with ChatGPT on their device of choice, practicing scenario planning.

[25:17] Carol shares some of the high-level points the paper explores. Reading the paper will give you the confidence to plan out a scenario planning session, with whom you should invite, what the output should look like, various ways to think about scenario planning, how you should start, and which methods might work for which situations.

[26:13] Too often, people think about scenario planning and they jump to "What's the output?" without taking into account the steps in-between. The paper takes you through beginning, planning, execution, and output. It's especially helpful for small teams or individuals. It's a place to start. It's customizable for your situation.

[27:08] Denise thought it was amazing for this white paper to include examples. It gives you a flavor of what would be the potential output.

[27:35] Carol shares some of the fun of using AI in the context of this white paper. As they worked on developing examples, they learned a lot.

[28:16] Using AI in scenario planning is a game-changer for small ERM shops to create content and thought leadership within your organization in the research area. Things that would take you months on your own, can be done with a well-worded prompt. We are not all "prompt engineers" but it is quite learnable.

[29:20] Tom got great joy seeing how quickly people could accelerate their understanding and their use of AI in the lab that Tom and Denise administered at the conference. AI makes this practice much more accessible to a bigger population of the RIMS membership.

[30:53] Carol explains that AI does not replace the risk professional. You have to read through the sources and make it work for your organization. Your professionalism includes your ability to discern what really matters. Tom adds to use your awareness of risk management so you don't put your company information into a public database.

[31:54] Final question: What do you hope readers take away from the paper "Managing Alternate Futures with Scenario Planning"? Denise: As you read this, it gives you the first step. The SERMC is also going to be launching "How to" modules. Also, there may be some hands-on sessions at the ERM Conference 2024.

[33:15] Carol: When we started writing the paper, my hope was that it would inspire somebody with the confidence to try it out within their organizations to see how well it works and feel confident in executing scenario planning within their organization. I truly believe you can make a difference in your organization.

[33:52] Tom: I want to thank Denise and Carol. This is a team sport. None of this would be here without their help. To someone listening, I would say the job of the enterprise risk manager is not getting easier. The environment you work in is more complex. The demand for efficiency in business value for an ERM organization has never been higher.

[34:36] Consider scenario planning as a means to deliver business value and strategic insights. A tool that formerly has been only available to wealthy organizations is now available more broadly. I hope that the paper has people asking, "Why not us? We should be doing this, as well."

[35:12] Carol: For those who read it and act on it, we'd love to hear from you. We say constantly in the council that we feed off of each other's ideas, The more broadly we can feed off of ideas, the better RIMS becomes and the better risk professionals we all become.

[35:32] Send your feedback to content@rims.org. I'll be sure that those messages get forwarded to the authors and contributors. I want to thank Tom Easthope, Denise Sobczak, and Carol Fox for joining us here on RIMScast. You did a great job!

[36:27] Special thanks to Tom Easthope, Carol Fox, and Denise Sobczak, for joining us here on RIMScast. The RIMS executive report we referenced is "Managing Alternate Futures with Scenario Planning" and it is available on the Risk Knowledge page of RIMS.org. A link is in this episode's show notes.

[36:44] There is also a link to the SERMC's page and as Denise said, be on the lookout for some more scenario-planning content from this fantastic council!

[36:57] Go to the App Store and download the RIMS App. This is an exclusive members-only benefit with all sorts of RIMS resources and coverage. Everybody loves the RIMS App!

[37:22] You can sponsor a RIMScast episode for this, our weekly show, or a dedicated episode. Links to sponsored episodes are in our show notes. RIMScast has a global audience of risk professionals, legal professionals, students, business leaders, C-Suite executives, and more. Let's collaborate! Contact pd@rims.org for more information.

[38:05] Become a RIMS member and get access to the tools, thought leadership, and network you need to succeed. Visit RIMS.org/membership or email membershipdept@RIMS.org for more information. The RIMS app is a benefit of RIMS membership and is available only for RIMS members! You can find it in the App Store.

[38:30] Risk Knowledge is the RIMS searchable content library that provides relevant information for today's risk professionals. Materials include RIMS executive reports, survey findings, contributed articles, industry research, benchmarking data, and more.

[38:45] For the best reporting on the profession of risk management, read Risk Management Magazine at RMMagazine.com, and check out the blog at RiskManagementMonitor.com. Justin Smulison is Business Content Manager at RIMS. You can email Justin at Content@RIMS.org.

[39:07] Thank you for your continued support and engagement on social media channels! We appreciate all your kind words. Listen every week! Stay safe!

Mentioned in this Episode:

Riskworld 2024 — San Diego, CA | May 5–8, 2024

RIMS SERMC Professional Report: Managing Alternate Futures with Scenario Planning

2024 International Risk Manager Survey conducted by FERMA in partnership with PwC FERMA

NEW FOR MEMBERS! RIMS Mobile App

Spencer Educational Foundation

Spencer Educational Foundation — Grants Page

RIMS-Certified Risk Management Professional (RIMS-CRMP)

RIMS CRMP Virtual Workshops

RIMS Webinars:

Ready for Tomorrow: Protecting Your Profits in the Property Market | Sponsored by Hub International | Feb. 29, 2024

Women of Risk & Compliance: Leading & Learning One Step at a Time | Sponsored by Origami Risk | March 7, 2024 RIMS.org/Webinars